Teosto in 2023: development of technological capabilities, cultural responsibility and establishment of the Teosto Cultural Foundation

CEO Risto Salminen’s review

Strong year in terms of results

2023 was a strong year for Teosto in terms of royalties. The amount of royalties collected increased by 3.9% year-on-year to a record EUR 83.8 million. Of the total amount, the share of royalties collected directly by Teosto increased to a record high of EUR 75.7 million (2022: EUR 72.8 million).

The amount of royalties collected through our partner network also increased by 5.6%, particularly due to the strong growth in foreign performing rights royalties (22.5%). Foreign performing right royalties are an important indicator of international demand for Finnish music. 

A record amount of royalties, a total of EUR 70.7 million, will also be distributed to rightholders represented by Teosto for music use in 2023. The total distribution amount increased by 0.6% compared to the previous year.

An age of major technological transformation

The expense percentage of Teosto’s operations increased as expected, mainly due to investments in technology. Copyright management is undergoing global upheaval in which modern technology and data have become the most important competitive factors.

Teosto’s technological capabilities will also take a leap forward when the ongoing system overhaul for reporting and distribution is completed and when the new international work documentation system  is ready for deployment. During the year, the overhaul of the rightholders’ web service was also completed, which has improved the experience of using Teosto’s services.

When the environment is changing rapidly, continuous development of operations becomes an essential prerequisite and a guarantee for the future. We have focused on finding the most suitable partners for Teosto and striving for greater cooperation whenever reasonably possible.   

Technological development is also fundamentally changing the market for the creative making and use of music. The rapid development of generative artificial intelligence is becoming a strong competitor for the custom of locations that use music in their operations, especially when it comes to functional music that is used for a specific purpose. At the same time, the use of artificial intelligence poses fundamental challenges for music composition and lyric writing, and the music industry as a whole. The most important thing is to ensure that copyrights are respected in the use of AI and that information about the content used to develop AI systems is made transparent. Music rightholders should not have to waive the elements that are central to the realisation of copyright, i.e. prior authorisation, recognition as the author and compensation for the use of the work, also in an AI environment. 

Cultural responsibility

Non-discrimination in the music industry and the reform of the entire industry are important themes for the future of the music industry. According to a survey we published in March 2023, 70% of female lyricists and composers feel that the music industry is unequal, whereas the corresponding figure for men is only 32%. The biggest reasons given for this were the prevailing attitudes in the music industry and the lack of networks and role models for women.

According to Teosto’s customer register, only one fifth of music authors in Finland are female or non-binary. Our mission and strategic objective for cultural responsibility is to provide a knowledge base, raise concerns in public discussion and facilitate discussion to promote diversity and equality in the music industry. However, no one can do this alone: we need the entire music industry to take part in these efforts.  In addition to promoting non-discrimination, we want to support the continuous emergence of new and diverse music in Finland and create pathways for new generations to have careers in music.

The Teosto Cultural Foundation was established to ensure the promotion of Finnish creative musical art

The board of Teosto’s Cultural Foundation for 2024. From left to right: composer Veli Kujala, Executive Director of the Finnish Music Publishers Association Jari Muikku, Chairperson of the Finnish Music Creators Pauliina Lerche, CEO of Elements Music Tommi Tuomainen, Chairperson of the board Anna Baijars, Executive Director of the Finnish Music Creators’ Association Aku Toivonen, Executive Director of the Society of Finnish Composers Vappu Verronen, music author Kyösti Salokorpi, and CEO of Teosto Risto Salminen. Photo: Mikko Käkelä

The preparations for using money from the Teosto Fund to establish a foundation, which began in 2019, were completed at an extraordinary general meeting held on 13 December 2023, at which the voting members approved the establishment of the Teosto Cultural Foundation and appointed the foundation’s first Board of Trustees. The Board of Trustees is chaired by Anna Baijars.

The purpose of the Teosto Cultural Foundation is to promote Finnish creative musical art and improve the working conditions of those who create it. At the time of writing, the foundation has been registered in the Finnish Register of Foundations and its Board of Trustees has carried out the measures to establish the foundation as planned. A minimum of about EUR 40 million in investment assets from the Teosto Fund will be gradually transferred to the foundation on the basis of the plan and decisions by the general meeting.

Teosto’s vision is to increase the cultural and economic value of music. In light of last year’s results and progress, we are moving towards that goal. I would like to thank our committed and skilled staff, the Teosto Board of Directors and our partners for a successful 2023!